Will Twitter’s built-in photosharing service make Twitpic, Yfrog fade?

Twitter is about to announce it will offer photosharing app a la Twitpic and Yfrog. Some forecast doom for the third-party photosharing apps.

Alexia Tsotsis reported Sunday in TechCrunch: “According to multiple sources, Twitter is on the verge on announcing its own built-in Twitpic competitor.”

Tsotsis said “photosharing is the next logical step of Twitter expanding its in-app experience. It’s basically grabbing at low-hanging fruit.”

Liz Gannes in All Things D confirmed the plans will be unveiled this week at the D9 conference in Rancho Palos Verdes, Calif. Twitter CEO Dick Costolo is scheduled to speak at the conference Wednesday.

No comment from San Francisco-based Twitter.

Gannes noted: “Currently, Twitter users who wish to post photos in their tweets must host them elsewhere, with popular options including Twitpic, Yfrog, Instagram and Flickr. Users then include links to the photos within their tweets. Many Twitter clients, including those developed by the company, use the links to go fetch the images and display them inline. But the process could certainly be smoother.”

Millions of dollars are at stake as companies such as Twitpic and ImageShack, which runs Yfrog, sell ads on image pages distributed by the tweeted links, she said.

Tsotsis said: “It’s only natural that [Twitter] would spend more resources on photosharing, especially considering how much money is being poured into the white hot space and that images were the crux of the success of competitor Facebook.”

Could Twitter’s own photosharing mean curtains for Twitpic and Yfrog?

Kelly Hodgkins said in Gizmodo: “No word on what will happen to TwitPic and Yfrog support if Twitter develops it own solution. We would like to think Twitter would be open to any service, but the company has become increasingly anti-competitive.”

Twitter has been adamant about third parties staying off its turf.

All Things D reported in March: “Twitter…told developers explicitly that they should stop making third-party clients, citing repeated privacy policy violations and an inconsistent user experience.”